Suddenlink also announced that residential high-speed Internet customers in markets on two other speed tiers will get a free speed boost.
Customers buying those on the 75 Mbps service will now get 100 Mbps, while 100-Mbps customers will be upped to 200 Mbps.
That raises a packaging issue. Where four speeds are available (1 Gbps, 200 Mbps, 100 Mbps and 50 Mbps), Suddenlink will have to convince consumers that pricing across the tiers are commensurate and fair.
That can be an issue if the top speed (1 Gbps) offers so much more value, compared to its price, that the lower offers start to look unfair. That is, if any actual number of customers actually pay the posted stand-alone rates.
CenturyLink executives, facing a similar situation, say the availability of gigabit offers actually spurs adoption of new 20 Mbps and 40 Mbps services. So gigabit service availability drives upgrades and new accounts, but for lower-speed services, perhaps primarily.
With discounts available through new customer promotional offers, Internet access prices now range from $35 to around $100 per month. It just depends.
Over time, the pressure to normalize pricing across tiers, in terms of price per bit, will be significant. If one assumes prices are hard to adjust upwards, in light of gigabit service pricing, it will be necessary to limit price increases for the lower-speed tiers.
The launch of the new Gigabit service is part of Operation GigaSpeed, the company-wide plan announced last August 2014. In contrast to companies like Google and AT&T, which are generally offering a Gigabit service only to a few neighborhoods in primarily urban markets, Suddenlink is making its service available to all households passed by the Suddenlink network.
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